Construction Materials Industry Overview
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1 Construction Materials Industry Overview August 23, 2016 Agenda Welcome Safety Brief Aggregates in our Life Presentation Economic contribution Aggregate uses and demand Industry Issues Aggregate production and mine life process Tour Albert Frei & Sons Walstrum Quarry Facility 2 1
2 Martin Marietta 7,200 Employees 270 Aggregate Operations 134 Ready Mix and asphalt Operations 2015 Net Sales of $3.3B Colorado Operations 13 Aggregate Operations 17 Ready Mix Operations 11 Asphalt Operations 3 Construction Industry Then and Now 4 2
3 Materials Demand Aggregates U.S. annual production is in excess of 2 Billion tons. Colorado consumption of aggregates ~9.4 metric tons per person per year In 2015 Colorado consumed 51 million metric tons of aggregate valued at 1$425M Ready Mix Concrete Colorado consumed 6.6 million cubic yards of ready mix concrete in plants in 60 counties Asphalt Colorado consumed 7 million tons of asphalt in stationary plants in 42 counties Portland Cement In 2015 Colorado produced 2.6 million metric tons. 5 Economic Impact In Colorado for every 29,800 tons of aggregate produced one employee is directly employed. Colorado mining jobs on average pay 50% above all other industries average. Aggregate, Ready Mix and Cement economic contribution. Aggregate ~$625M Cement and Ready Mix ~$811M Source: National Mining Association (NMA), Colorado Stone Sand and Gravel Association (CSSGA), Portland Cement Association (PCA) 6 3
4 Employment Impact Cement and Concrete Related 13,931 Employed Colorado Construction Industry s value in 2015 was $15.3B Aggregates 5,600 Employed Construction 197,332 Employed Colorado Economy Source: Colorado Demographics, PCA, CSSGA, CU Leed School of Business Construction Materials In Daily Life School and Workplace Highways Home 8 4
5 Aggregate Products Sand Decorative Rock Rip Rap Crushed Stone Light Weight Boulders 9 Aggregate Utilization Concrete Asphalt Drainage Other 80% Aggregate Floors and walls Concrete pipe Tilt Up and Precast Structures 95% Aggregate Roads Shingles French Drains Erosion Control Under Drainage, golf course, sport fields Armor Stone Base for foundations and roads Utilities Building stone and block 10 5
6 Roads and Highways Interstate requires 38,000 tons of aggregate per one mile 11 Industry Issues Difficult Permitting Environment All governmental levels Regulatory Environment MSHA Rule making Waters of the U.S. Endangered Species Workforce Availability and development Infrastructure Ability to deliver products Impact to the economy and competiveness 6
7 Aggregate Production Cycle Permitting Reclamation Quarry Operations Sales Processing 13 Aggregate Production Cycle - Permitting Aggregate Source Identified: Hard rock: Igneous, Sedimentary, Permitting or Metamorphic Alluvial: Sand and Gravel Quality: hardness, size, shape, chemical properties Location to market and transportation system Quarry Reclamation Operations Sour Federal: Corps of Engineer Permits, BLM Contracts, Environmental Assessments State: DRMS, SWSP, Air Permit County: Zoning, Special Use Permit Municipal: Zoning, Special Use Permit Sales Processing Permitting Process Evaluation of Financial Viability 14 7
8 Aggregate Production Cycle Quarry Operations Crushed Stone: Permitting Drilling and blasting. Utilize loaders, shovels or excavators to load. material. Haul material by truck or conveyor to the plant. Quarry Reclamation Operations Alluvial No drilling and blasting Sour Utilize loaders, draglines, scrapers, or dredge to excavate material. Haul material by truck, conveyor, or scraper to the plant. Sales Processing When a dredge is used the material is pumped to the plant utilizing a slurry pump. 15 Aggregate Production Cycle - Processing Processing Plant: Crushers: Jaw Crusher, Cone Crusher, Permitting VSI to reduce the size of the material Screens: Inclined, flat to size the material Conveyors: Transport the material within the plant Quarry between crushers, screens Reclamation and final stockpiles Operations Sour Wash Plant: Screens: Wet screens to rinse material, dewatering screens to remove water Log washers or coarse material washers to clean the material Sand screws and or classifiers Sales are used to Processing produce sand Recycle Water: Settling ponds, clarifiers, or thickeners 16 8
9 Aggregate Production Cycle - Sales Aggregate Sales Process: Material is transported to Permitting the end customer or market by truck, rail, barge, or ship. Material is loaded by loader or load out Quarry Reclamation bins. Operations Materials are scaled by truck Sour scales, rail scales, belt scales and/or loader scales. Freight Costs often exceed the material cost when sources are not close to the market. Sales Processing 17 Colorado s Infrastructure Structurally Deficient ASCE in % CDOT in % CDOT in % ASCE 2010 State Report Card C+ Construction Materials Vital To All Of These Infrastructure Needs CDOT ROAD GRADE 2011 C C+ Target lowered from B in 2011 to B- in 2013 Source: American Society of Civil Engineers, CDOT 9
10 The Next 20 Years +51% +64% 8.3 Million COLORADANS 44.9 BILLION MILES TRAVELED +116% 20.4 MINUTES BECOMES 44 Source: CDOT, 2015, Colorado Demographics Office 19 Aggregate Production Cycle - Reclamation Primary Objective: Return the land to beneficial use Five Rs Reform Reuse Rehabilitate Restore Reclamation Recover Permitting Sour Quarry Operations Colorado s Post Aggregate Mining Benefits Water storage: 1.1million ac-ft. of water storage, more than the proposed Two Forks Dam project. Recreation: Fishing and or boating lakes, golf course, and parks. Wildlife habitat: Sales Wetlands or other Processing wildlife habitats. Agriculture: Farmland for various crops
11 Aggregate Production Cycle Reclamation Examples Before After 21 Aggregate Production Cycle Reclamation Examples Before After 22 11
12 Contact Information Todd R. Ohlheiser Executive Director for Colorado Stone, Sand & Gravel Association (CSSGA) Colorado Ready Mixed Concrete Association (CRMCA) Tom Peterson Executive Director for Colorado Asphalt Pavement Association 23 12
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